HOUSING TEA LEAVES

Housing, out to the future. It used to be that we watched the 30 year bond to get a clue of where interest rates were headed. No more. Now we look at the five year treasury for clues. And as you see, the opinion of everyone is that rates are coming down, and down a lot. Recent low starts may be more weather than reality, but the default rate is scaring lots of bankers who put people into these adjustable rate mortgages. If rates come down payments will follow.